Quản trị kinh doanh - Chapter 8: Supplier selection and evaluation

1Chapter 8:Supplier Selectionand EvaluationPurchasing and Supply Chain Management, 3rd edition, Copyright 2013, W. C. Benton Jr., All rights reservedCurrent Global TrendsProduce quality products at reasonable pricesBuying organizations are reducing the supplier baseIncreasingly important role for the purchasing and professional purchasing managers2Strategic Make vs. BuyDecisionThe Process:Determine what product or service is under consideration. Consider the in-house capability.Key Make-or-Buy MistakesNot being proficient at identifying own core capabilities Waiting too long to assess the value of consultants or strategic partnersNot recognizing that the product or service is approaching maturityNot recognizing that there are always new competitors with new technology3Benefits of OutsourcingVertical integrationExpanding into areas that are at different points on the same production pathMore control vs. Greater competence requirement in each of the areasOutsourcingA delegation of production capabilitiesConcentrate on true core capabilities vs. loss of control and non-core capabilities 4Outsourcing and Supplier SelectionThe selection of the correct supplier is the most important purchasing activity.The buying firm must spend extensive time analyzing and carefully selecting the correct supplier.Periodic supplier evaluations are needed to ensure continuous supplier performance achievement.5Supplier Relationship Management (SRM)Factors for stronger supply chain relationship management:Businesses purchase larger percentage of product value The shrinking supplier basesIncreasing shortages of skilled supplier capabilities and resources6The 4 Pure Supply Management RelationshipsCounter-productive relationshipsLose-LoseTransactional or competitive relationshipsWin-LoseCooperative relationshipsWin-WinCollaborative relationshipsWin-Win7SRM and 3 Supplier Categories Strategic suppliers Supply difficult to replace essential materials and capabilities Maintaining and strengthening these relationships are a major concernPreferred suppliers Important but replaceable with alternative suppliersTransactional suppliers Provide easily to replace non-critical resource8The 3 Common Supplier Evaluation SystemsThe categorical methodThe cost-ratio methodThe linear averaging method9Strategic Supplier Relationship ManagementFor each strategic supplier, a key contact within the buying firm must be establishedOwner of a specific strategic supplier relationship Management Methods:Supplier profilesStrategic Supplier Performance Review ProcessSupplier development10The Strategic Supplier Performance Review ProcessA process for managing performance and giving feedback to the strategic suppliers.Requirements:Consistent measurements for evaluating current performance of existing strategic suppliersMust have a standard template for a customized review processThe template should include a personal meeting with the functional managerThe general review process should take approximately two workdays to complete11Supplier DevelopmentProvide the supplier with opportunity to:Take advantage of the learning opportunities Improve its overall performance with the buying firm and with its other customersSteps of supplier development program (SDP):Supplier evaluationsCommunicate the problem and motivate the supplier to change its resultsSupplier evaluation report cardImplement SDPCreate formalized routine communicationsEmpathize the need for supplier commitment 12Supplier ReductionIt is recommended to reduce the overall supply base.Guides to supplier reduction analysis:Grade methodsBased on a score or grade given to the supplier by the buyer for some attributeHurdleSuppliers are required to “jump” over higher and higher hurdles to win the buyer’s businessE.g., certification13Questions?14